By Michael Waterson
In January, Andy Burnham, mayor of Greater Manchester, made a bold announcement, to immediate opposition from established operators. He proposed Manchester have a system of bus operation that has existed in London all century. In fact, London’s buses are organised differently from those everywhere else in Britain. Transport for London specifies the routes and frequency and issues tenders on a route-by route basis, awarding the tender to the company that offers the lowest price, subject to quality.
Bus usage varies widely across authorities, with London being a positive outlier in terms of passenger journeys per head. The top five in England outside London are Brighton and Hove, Nottingham, Reading, Tyne and Wear, and Bristol. (Bus services are a devolved matter, and Scottish and Welsh transport statistics are much more aggregative, hence my focus on England.) At the other end of the scale come rural counties such as Shropshire, Herefordshire and Rutland, plus several affluent areas in the home counties. So, while in Brighton there were 171 journeys per head in 2017/18, in Herefordshire there were 11. To some extent, this reflects car availability. Unfortunately, good figures are only available in Census years, so most recently for 2011. People in central London boroughs are least likely to have a car available, but while it is noticeable that Nottingham scores quite low on car availability, so to do Manchester and Liverpool, and in Shropshire and Herefordshire, one sixth of households had no car. So, differences in usage cannot merely be due to car availability.
Really, there are two separate issues. In urban and metropolitan areas, the key issue is how well the network of buses provides the journeys people make in travelling for work or leisure. Competition in the market (as opposed to for the market, the London case) means providers have no natural incentive to provide interconnection with each other. Moreover, competition on heavily trafficked routes is not useful if passengers have a single-company season ticket or have bought a return ticket. It is here that the benefits of franchising, or competition for the market, the London system, are most likely to be found. Indeed, this has been recognised in a relatively new piece of legislation, the Bus Services Act 2017, which empowers metropolitan mayoral areas, such as Greater Manchester, to adopt a London-style system, or a bus partnership. It is likely that the metropolitan Tyne and Wear, West Midlands and West Yorkshire areas will look to the Manchester experience in developing their own schemes. Tendering for urban bus services is widespread throughout Europe; it is Britain that is the outlier.
Outside large urban areas, bus services are much more heavily dependent upon local authority subsidies. These have been subject to severe cutbacks, as local authorities cast around for savings. Indeed, the plans make painful reading. From Shropshire’s plans for 2019/20, we see “Shrewsbury to Bridgnorth … Reduction from a 1 to 2 hourly service” … Bridgnorth to Kidderminster … Remove Saturday journeys.” The cuts in local authority subsidies have been savage: In Worcestershire, Herefordshire and Wiltshire, between 2010/11 and 2018/19, bus subsidies have been cut on average to 1/3 of what they were, whilst in Oxfordshire, they have been phased out altogether!
However, the picture is not one of unremitting gloom. While usage has been dropping most steeply in metropolitan areas, where commercial considerations determine what is offered, the new powers offered by the Bus Services Act have the potential to drive change. Even if this does not lead to a complete London-style franchising model, it may at least create some form of closer partnership, where the companies involved recognise and take advantage of the synergies offered, and the Act spells this out fully.
In addition, there are areas where usage is growing. Reading, Brighton, Bath and Bristol are all examples, and exhibit quite high usage by national standards. Reading and also Nottingham, are both cases where the service is mainly operated still by the local authority, so probably has a greater service element tempering commercial considerations.
Moreover, even outside these areas, there are examples of frequent bus services operating between urban centres. Between Gloucester and Cheltenham, for example, there is a 10-minute frequency service during the main part of the day, and there is even that endangered species, the night bus, plying between the two. Another example is the remarkably intensive service between Harrogate and Knaresborough in Yorkshire.
In summary, despite the potential benefits in terms of reduced congestion and cheap mobility providing access to employment and leisure activities offered by local bus services, the industry overall is in a state of decline. In terms of reversing that decline, it is also clear there is no single solution. Areas where the greatest benefits from an interconnecting network are available have a potential set of answers through the Bus Services Act. Outside those areas, but still in an urban context, lessons can probably be learned through careful observation of what works in affluent (Reading) and less affluent (Nottingham) areas, and how an intensive inter-urban service is feasible in certain cases.
In rural areas, one key point is that often, declining local authority subsidies to operators to provide key links are outweighed by payments relating to concessionary fares. In Worcestershire, for example, the latter is almost three times the former. Whilst not a direct subsidy, it does seem that concessions to better-off pensioners are unjustified. If some relatively straightforward payment mechanism for their concession card from those with substantial means could be devised, they would retain the flexibility of the card (for use anywhere in their country) yet free some money for local authorities to spend on subsidising services for poorer people of working age; I am aware I am arguing against my own personal interests here!
This article has been written by Michael Waterson, professor of economics at the University of Warwick since 1991.
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