WIREDGOV

Bus passengers will be hit with years of fare hikes and cuts to services unless Government gives local people more say on where billions of pounds of public money is spent, council leaders warned last week.

The Local Government Association, which represents more than 350 councils in England and Wales, is pressing for radical reform of the way private bus companies are subsidised.

Commercially run operators receive £2.6 billion from the public purse each year – amounting to just under 50 per cent of the industry's turnover. The majority of the money is given to firms directly from Whitehall, marginalising the ability of councils and passengers to stipulate the services they want in return.

At the Local Government Group's Annual Conference today (Wednesday), councillors will call for local authorities, passengers and residents to be put in charge of commissioning bus services.

Handing control from Whitehall to local areas will increase competition among operators, and ensure that the subsidy is targeted more effectively. Councils say they should be able to impose conditions on the public money provided to support bus services. They could agree with bus companies to protect existing routes, insist on new routes or offer reduced fares to job seekers.

Cllr Peter Box, Chairman of the Local Government Association's Economy and Transport Board, said:

"Government needs to act urgently to break the cycle of fare increases and cuts to services. With less public money available to support the bus services that millions rely on, the need for reform is more pressing now than ever before.

"We need to introduce more competition in the bus industry and the Competition Commission has recognised that the best way to address this would be to put local authorities and local people in control of commissioning services.

"Towns and cities should be able to make greater use of franchise arrangements, similar to those in London.

"Putting councils and residents in the driving seat will help ensure all public money spent on buses is used to subsidise the running of vital services and not just to bolster the profits of routes which are already making money."

NOTES TO EDITORS

1 Department for Transport figures for 2009/10 show that 49.1 per cent of bus industry turnover – or £2.6 billion – came from public subsidies. http://www.dft.gov.uk/pgr/statistics/datatablespublications/public/bus/support/bus0501.xls

2 The Office of Fair Trading (OFT) referred the local bus market to the Competition Commission in January 2010. The commission is carrying out a comprehensive investigation to see if any features of this market prevent, restrict or distort competition and, if so, what action might be taken to remedy the resulting adverse effects on competition. For further details of the commission's interim findings go to: http://www.competition-commission.org.uk/press_rel/2011/may/pdf/2611_Press_Release.pdf

Contact: LGA Media Office
Author:  LGA Media Team, Tel: 020 7664 3333