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Cutting fares and improving the quality of local bus services - the next front in the cost of living crisis.

Although growth has finally returned to the economy, millions of families are feeling no recovery at all as they face huge pressure on household budgets. We have set out Labour's plans to deal with rip off prices in the energy market with a price freeze until 2017, fundamental reform of the market and a new regulator to take on the energy giants. The next challenge for Labour is to tackle the broken and failed local bus market.

Figures from the Department for Transport show that in 2013, 4.6 billion bus passenger journeys were made in England. The same figures show that across the whole of Britain two thirds of all public transport journeys are made by bus. Whilst much time is devoted to debating rail and more recently HS2, it’s clear we need a renewed focus on local bus services.


There is a great divide in our country: between the areas of regulated and deregulated local bus services. Since bus services were deregulated outside London by the Thatcher government in 1986, the two different systems have produced very different outcomes in terms of passenger growth. According to pteg, the Passenger Transport Executive Group, regulated services in London have increased bus patronage by 95 per cent on 1986/1997 figures. In contrast, deregulated services in shire areas have seen passenger numbers fall by 18 per cent and in metropolitan areas by 42 per cent over the same period.


The previous Labour government recognised the need for bus market reform. We introduced legislation to create Quality Contract Schemes: a mechanism that would allow local transport authorities to re-regulate local bus services if certain criteria were met, including demonstrating market failure. I have previously written in detail for the Fabians on the merits of such a scheme and my three year ongoing campaign to introduce this system across Tyne and Wear, in the face of bitter opposition from local bus operators.

During my three year campaign, other transport authorities were won over by promises from bus operators and have instead pursued a partnership approach. One such area is Sheffield. Despite assurances, passengers in Sheffield have seen First Group put up fares by a massive 13% and integrated ticketing has been abandoned. Faced with budget pressures the local transport authority is having to make £8.3m of cuts, withdrawing bus routes, reducing concessionary schemes and raising prices on community transport. The Partnership Agreement in Sheffield is proving to be a case of operators protecting their own interests. This short term fix fails to address the fundamentally broken system where bus operators receive massive public subsidy with little or no accountability and where local people are denied a say. According to the House of Commons Library, the taxpayer subsidised bus services by approximately £2.3 billion in 2011/12. Subsidies account for around 45 per cent of all bus operators’ revenues.

We need a long term solution to address the balance between operators and the taxpayer. The transport authority in Tyne and Wear has shown bold leadership in trying to address this problem, but it is an arduous process. The current framework for introducing Quality Contracts is far from perfect. It sets a high bar for the introduction of the scheme, even in an area like Tyne and Wear where there is clear market failure. There must be a way to deal with this and the unscrupulous attitude of some operators. They appear more concerned with threatening legal action than dealing with cuts to services and rising fares. Their opposition is hardly surprising given that Stagecoach alone made over 18% net profit in the last financial year in Tyne and Wear. Labour's draft policy document on Living Standards and Sustainability proposes providing additional support to transport authorities, making it easier for to re-regulate local bus services. If introduced, local bus services could see a revival across the country.

A future Labour government would need to do more with less. We are committed to balancing the books and delivering a surplus on the current budget in the next Parliament. We can no longer afford to allow a small group of operators to receive billions of pounds of taxpayer support with minimal accountability or transparency.

A local transport revolution could be one of the legacies of a future Labour government; empowering local people where they want the power to create a London style-bus network.

Local bus services matter. They may not receive the same coverage as a high speed rail or Britain's airport capacity, but a re-regulated local bus networks would support the long term change our country needs.


This article was originally published by the Fabians in May 2014

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