“The Government does not believe that all bus routes and timetables should be regulated by local authorities; we believe that no one size fits all and that different solutions apply in different places.” – Former Minister for Transport, Tavish Scott, 2007
“The issue is not who owns the buses, though there is a tendency by some to focus on that issue. A ‘one size fits all’ solution will not work and I am opposed to the wholesale re-regulation of buses.” – Current Minister for Transport, Humza Yousaf, 2017
The Scottish Government recently announced its long awaited Transport (Scotland) Bill, kicking off a new debate on the future of public transport in Scotland. The legislation contains provisions on low emission zones, double parking, and road works, but the most divisive aspects relate to the unglamorous world of bus services.
Around two thirds of all public transport journeys in Scotland are made by bus. The sector is vitally important to deprived areas, rural communities and elderly passengers. Almost half of all low-income homes lack access to a car and a study from 2014 concluded that effective bus services are especially important to jobseekers. Unfortunately, the sector is in decline. Passenger numbers have been dropping dramatically over the past few decades, including after the deregulation of the sector in the 80s, and have failed to recover since. Marketisation was supposed to encourage competition, but a survey from 2016 found that almost half of all bus transport contracts in Scotland had only a single bidder. This lack of competition increases tender prices and puts pressure on local budgets. Bus companies themselves are also facing challenges. Around 45% of their income come from public subsidy spending which is facing an uncertain future in light of wider budgetary pressures. Passenger revenue, which accounts for the remaining 55% of income, has failed to grow despite rising fare prices. Over the last few years, passengers have faced dislocation as less profitable routes are closed, particularly in rural areas.
The decline of the bus has been a gradual process. Labour tried to rectify the situation back in 2001 with its Transport (Scotland) Act. In typically 90’s style, the Act didn’t provide for public ownership but instead gave local authorities the ability to enter into technocratic-sounding partnership agreements with private operators. In practice, these arrangements were rarely used. Over the last 17 years, there have been only four ‘Statutory Quality Partnerships’ and zero ‘Quality Contracts’ (essentially franchising arrangements). The toolkit created by the Executive was found to be unwieldy and overly bureaucratic.
The Scottish Government’s response with its new Transport Bill has been to rename and tweak the existing arrangements in an attempt to make them more attractive to both public and private stakeholders. Under the proposed reforms, private operators will now be expected to adhere to a more extensive set of service standards but, in return, can expect to benefit from greater levels of infrastructure investment from the local transport authority as well as a greater say in how the plans will be developed. Ministers have largely echoed the objectives of the 2001 Act, although aspirations about “growing the bus market” are now absent.
These gradualist proposals have been described as a “damp squib” by opposition parties. MSPs argued that private operators will simply cream off the most profitable routes while leaving more challenging areas to the public sector. The new legislation only allows local bodies to take over bus routes if there are no existing private operators and direct competition with the private sector is prohibited. In essence, the Scottish Government has carved out a small exception allowing the public sector to fill gaps left by the market.
The political allure of this partnership approach is easy to understand, it focuses on consensus, it doesn’t challenge the financial interests of private operators, it costs very little in the short term, and it has the superficial appearance of practicality which can be persuasively contrasted with “ideological” commitments to public ownership. However, the evidence in favour of this model isn’t exactly compelling. Labour’s previous attempts only produced a modest and temporary rise in passenger numbers. Reports of passenger satisfaction are mixed and while there have been significant capital investments in newer and greener vehicles, much of this has been supported by public spending.
One of the most successful operators in the UK, Lothian Buses, is publicly owned. The Scottish Government itself is supportive of a public bid on the railways and has always been reluctant to entrust CalMac to a private operator. There is, unsurprisingly, support among local councils for more public involvement and environmental groups including Friends of the Earth have argued it would increase accountability, reduce instability and prioritise passenger needs over the interests of shareholders. Those opposed, notably transport operators, argue that public ownership could distort competition, although at this stage the market has become consolidated into a few major operators and is heavily reliant on public subsidy. Ultimately, the vision of a self-sustaining, competitive and growing private bus market has not been realised despite decades of repeated legislative effort and now seems increasingly implausible.
It’s not clear, in this context, why ministers still feel the need to place qualifications and restrictions on the public option for bus services. Policy makers talk frequently about the need to look ahead towards digital technology, high-tech green vehicles and smart ticketing. Perhaps it’s time to challenge old fashioned orthodoxies on public ownership as well?
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