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Bus Background

Bus BackgroundWe did quite a few articles about buses when the OAP concessionary travel scheme was under fire from former Commissar John Coombes.

That eventually settled down, but, for an entirely different reason, buses have moved up the agenda again in recent weeks - and we thought our readers might want to be clued up as to what's going on.

There are two big stories.

80 All Out. The first is a truly remarkable piece of stupidity and involves a bus company that operated only for a few days before closing altogether as being either unviable or insolvent, it's not clear which.

No Night Service. The second is a look at the prospect of some bus services disappearing altogether from many Fylde villages in the evenings and at weekends after April.

To understand what's going on in both of those articles, we need to look at the present structure and arrangements to provide bus services because - like many other issues since we joined what was supposed to be a 'common market' - things are not that simple any more.

So the first part of this Bus Trilogy gives the background to the changes made over the last few years to what most folk still call a bus service.

Historically, buses were all commercial undertakings. People saw the chance to make a bob or two by carrying people about and did so.

Then in the 1930s, Government and Councils saw the benefit of reducing congestion on the roads by getting more people out of cars and on to buses, and they started running buses as a public service, either as the state owned National Bus Company or by municipal owned bus operators.

In this area, as well as a few 'commercial' bus operations, we had Blackpool Corporation Transport's cream and green buses, and in Fylde, Fylde Council's 'Blue Buses' providing the main local bus services as a public service, whereas Ribble Buses ran as a commercial business.

Both of the public service bus operations were subsidised from taxation, with small sums charged for passenger journeys.

Bus services were seen as a public good.

Many people who are older than 30 think this is still how buses work.

But it isn't.

The powers that be believe that one of the conditions for us being in a common market is that the playing field has to be level for all operators in all countries.

That means having just one set of rules across the whole of the common market area. And in the case of buses, UK subsidies from taxation were mostly outlawed - unless they were subsidies available to commercial operators as well as what we used to call public services.

So it was that the Transport Act 1985 (introduced in October 1986) deregulated bus services in England, Scotland and Wales.

This was one of many of the de-regulations that took place in the Thatcher era. Councils were no longer able to run bus services themselves. The best they could do was re-form their bus fleets into commercial companies that operated as a business - and at (more or less) 'arms length' from the Council.

So it was in Fylde that 'Blue Buses' became a commercial entity and entered into (initially) cut-throat commercial competition with Blackpool's new commercial public transport undertaking (and others).

That competition didn't last long, because the directors of Blackpool Transport and Blue Buses saw the pointlessness of chasing each other along the same routes to compete for passengers, so Blackpool made an offer that Fylde's directors could (or at least did) not refuse, and Blue Buses were absorbed into the commercial entity that ran Blackpool Transport.

So much for increased competition being the spur to improving the services and reducing the cost for passengers.

The Transport Act had introduced competition on local bus services for the first time since before war. To operate a bus service all you had to do was become an accredited operator and give 56 days notice to a Traffic Commissioner and you could start; alter a bus route; or end the service altogether.

The idea was that - freed from the dead hand of bureaucracy - new bus companies would spring up and run commercially successful services that were better than anything a council could run.

But competing with well established services (that were merging with each other specifically to avoid competition-induced pressures) was not easy, and few did so successfully.

So, if the aim of deregulation was improvement through competition, it didn't quite work out.

The licensing of bus operators and bus services was, and remains, the responsibility of the Regional Traffic Commissioners.

They are statutorily independent licensing authorities responsible for bus, coach and goods vehicle operators and for local bus service registrations. They decide who can run a bus service. The now also have powers to control punctuality and performance, which they can enforce using fines and prohibitions.

One of the things they require is that bus operators must be of adequate financial standing.

Seeing as how it's based on a European Directive, the assessment of financial standing required is, itself, based on the number of vehicles employed in delivering the service, and a fee is payable for each authorised vehicle, based on the rate of exchange for the Euro as set each October.

Applications to operate a UK service received after 1 December 2013 faced a revised financial assessment which was newly implemented from 1 January 2014.

This required a standard licence applicant to demonstrate they had capital reserves of 7,400 for the first vehicle and 4,100 for each additional vehicle they requested to be authorised.

Existing operators who apply to vary their licence were also required to demonstrate financial standing for the existing and additional fleet authorities against the new levels from 1 January 2104.

The fees for holders of what are called 'restricted licenses' are even less - at (for 2013); 3,100 for the first vehicle and 1,700 for each additional authorised vehicle.

We were shocked to see how low these figures were.

We'd expect to see financial standing requirements for contracts to show the company has funds in place (or a guarantee of funding availability) to operate for a period that extends at least to the value and term of the contract it is undertaking.

The 'fault' here is that the EU's aim with its 'financial standing' test, seems mostly to ensure the service operator has the money to be able to properly maintain the vehicles. There appears to be no formal requirement to assess the scale and resources of the company making the application.

So, in the brave new world of euro-inspired de-regulated bus operations, you can form a new company, lease a bus or two and provided you have capital of 7,400 for each bus, and you aren't a person with inappropriate convictions, Ding Ding, its off you go.

That completes the background reading for the next two of our buses trilogy.

The other two articles are  "80 All Out"  and  "No Night Service"

Dated:  16 January 2014


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