If unbridled free competition was the neo-liberals’ dream, it was not sustainable. Within 10 years a massive but inevitable private sector consolidation took place. Five huge public transport companies, most of which have become multinationals in their own right( FirstGroup, Stagecoach, Arriva, Go-Ahead and National Express) together control over 70 % of the market.
A 2006 House of Commons Transport Select Committee report into the state of Britain’ s bus industry was highly critical of the role played by Britain’ s private bus operators:“ We had evidence that, under the current system, operators are abandoning unprofitable routes which are nevertheless used and are necessary links for communities to work, social and leisure facilities. This forces local authorities to take the routes over and to issue a tender for their operation. Often, an operator who cannot make a commercial success of such a route will apply for the subsidised, tendered route. This practice can be particularly frustrating for a local authority when routes are being abandoned when they are simply less profitable, rather than unprofitable. Services are withdrawn in order to maximise profits for the operator by shrinking their network and concentrating on the highest revenue-raising routes, at the expense of the travelling public. On occasion, this can mean that, as a transport authority implements bus priority schemes or introduces a quality bus corridor, it finds the result is shrinkage of the bus network.”
The effect on workers and passengers
The biggest losers were those who work in the bus industry. Bus drivers hourly wage ranked 7 % above the average blue collar worker before 1986 but within 10 years had fallen 14 % below. Intense competition at a time of high unemployment and falling passenger revenues led to unrelenting demands for pay cuts, longer hours, reduced pensions and cuts to sick pay and other conditions. Strong union fightbacks since have recovered much but not all of these losses.
Passengers lost out as fares have consistently risen above inflation, networks have shrunk and frequencies and reliability have deteriorated. Local councils far from saving money are paying out as much as ever. All the infrastructure costs – bus stops, bus stations, bus lanes and other bus priority measures, timetables and other transport information and all-operator ticketing – are entirely provided by the public purse. The private bus operators receive more than one third of their income from the public purse. In 2011 / 12 Britain’ s bus bosses raked in total revenue of £ 5.425 million of which only £ 3.005 million came from fares. The rest came from local councils and government; £ 0.994 million gross public transport support; £ 0.995 million concessionary fares; and £ 0.430 million Bus Service Operators Grant( BSOG).
' As London ' s subsidy edges towards £ 1 billion per year, it is clear that buses would be cheaper to run under direct public ownership '
London’ s buses were privatised some 10 years later under a“ controlled competition” model. Unlike in the rest of Britain, Transport for London( TfL) controls the bus network and determines the timetables, frequencies and fares. Private bus companies compete to win individual route franchises. In the initial period, continuous undercutting in rival bids led to a dramatic reduction in terms and conditions for employees. Bus driving became so unattractive that TfL and the bus operators faced acute staff shortages and a crisis in bus reliability. Ken Livingstone’ s tenure as London Mayor largely put this right, with a combination of much increased public funding, cooperation with UNITE the bus-workers union, and a strategic expansion in the bus network. Notwithstanding some improvements to bus workers pay and conditions, serious problems remain particularly when routes change hands. Drivers transfer with the mileage under TUPE but pension rights are not protected and drivers can be moved to depots more than 20 miles away.
For passengers, London’ s route tendering system has been far more successful than the
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