Bus Services Bill [HL]

Written evidence submitted by Roger Sexton (BSB 02)

I am a retired University Law Lecturer with a keen interest in public transport. I specialise in the regulation of public transport, especially (but not exclusively) buses. I have made a number of written submissions to the Commons’ Transport Committee, and in February 2012 I gave oral evidence.

Summary

I have three points

· All Local Transport Authorities should have bus franchising powers.

· Compensation for loss of ‘goodwill’ should be paid to bus operators if they are displaced by franchising.

· Local Authorities should have the power to set up and own a bus company.

1 Franchising – The European Norm

I make no apology for repeating here what I said to the Transport Committee in February 2012 in answer to question 93.

Q93 Chair: ‘Dr Sexton, what is your approach to dealing with the current problems we have. Are you looking to more competition or at the more regulated system?’

Dr Sexton: ‘I am very much looking towards more regulation. I have been consistent in that view in the submissions I have made in writing to this Committee in the past, particularly if you look at the submissions I made in 2006 and 2007. Certainly in 2007 this Committee very much endorsed some of my views.

‘I would go the whole hog and introduce a franchising system for the whole United Kingdom, or at least England outside London, very much on the basis that it works not just in London. I would stress that it is the norm in pretty well all of our European neighbours both within and outside the EU. You do not have on-the-road competition. That is something very peculiar to Britain outside London as far as western Europe goes. Instead, you have carefully integrated systems of public transport, which will also embrace trams, local trains and, where appropriate, ferries. They are integrated by some kind of public transport authority. It varies from country to country.

In Sweden, it is done by an organisation for each region called a Länstrafiken. In Germany, Austria and also in the South Tyrol, in all urban areas and some rural areas, there is an organisation called a Verkehrsverbund. That basically controls all local public transport except intercity trains and intercity buses. In Switzerland, which is often regarded as a public transport paradise, long-distance transport is still controlled by the Federal Railways. Local public transport-and that will include the boats on the lakes and even some of the cable cars-is controlled by the cantons or groups of cantons.’

2 The Lesson from Europe – All Local Authorities Should Have Franchising Powers

Looking across Europe there is a myriad of different types of public transport authority, all with franchising powers. Some of these public transport authorities may correspond to the territory of a city which has an elected mayor. That is, however, unusual. In France the franchising authority is usually an ‘agglomeration’ – a group of local authorities each with its own mayor.

Most European public transport authorities embrace a quite wide area, covering several local authority areas. This is particularly true of Verkehrsverbunds. There is no ‘Mayor of the Verkehrsverbund’.

What matters of course is that the franchising is done by a body which is democratically accountable. European experience proves that it is absurd to limit franchising to areas which have an elected mayor.

3 Compensation for Displaced Operators

Surprisingly there is no provision in the Bus Services Bill for compensating operators who, because of franchising, lose the right to operate routes which they have perhaps run for very many years. I adhere to the views I put forward in 2007 to the Commons Transport Committee and set out at Ev 110 of the Transport Committee’s Ninth Report for 2006-7. Limited compensation should be paid to displaced operators for loss of goodwill. There should be no other compensation.

I wish however to expand on the Blogtown example I gave in 2007. If the franchising in Blogtown is done on a route-by-route basis, the established dominant operator, ABC buses, is unlikely to lose all its routes in the area. More importantly, if ABC has a reputation in Blogtown for operating a good service, it will be in a strong position to win a lot of the route franchises in Blogtown, provided the franchising is done on the basis of ‘value-for-money’ rather than on the basis of ‘cheapest always wins’.

4 There should be no ban on new municipal bus companies

The last couple of years have seen a number of medium size bus companies go into administration. If this trend continues there is a real danger that areas of the country will be left without a bus company! Local Authorities (especially rural local authorities) must therefore have the power to set up a bus company.

March 2017