The pace of cost rises in the bus industry slowed significantly in the 12 months to February, with overall gross costs for the sector in Great Britain outside London up by 3.1% in that period according to analysis by the Confederation of Passenger Transport (CPT).
That headline figure is among a host of data collated in the Confederation’s Cost Monitor Report. It represents a real term fall of 3.7% when adjusted for inflation to December 2023 prices, CPT adds. Across the two years before the period in question, costs had risen by over 16% above inflation.
Despite the relatively soft increase in overall costs, labour expenses grew by 7.6%, a further sign that overall pressure “has not gone away,” says CPT Operations Director Keith McNally.
He adds: “Last year, those increases were offset by savings and efficiency improvements elsewhere, but we cannot assume that such savings can always be achieved.”
A summary of Cost Index Report findings is available on the CPT website. It outlines that outside London, average savings in principal unit costs were seen in depreciation and leasing (-5.9%), engineering (-13%), semi-variable costs (-21.3%) and overheads (-1.1%).
Despite those averages, regional variation was significant. As an example, Scotland saw claims and insurance costs fall by 8.8% but in Wales they rose by 27.7%. In the North West region of England, claims and insurance costs dropped by 40.2% but they lifted by 179.3% in North East England.
Gross operating costs per bus hour also varied regionally. North East England was 25.1% lower than the average for Great Britain outside London, while the West Midlands was 5.3% above it.
Data on kilometres run provided by participating operators show that outside London those increased by 2.3% in the year to February. CPT suggests that such an uplift is down to Bus Service Improvement Plan funding in England and easing driver shortages. However, it notes that the rise does not apply to Scotland or Wales and is not universal across English regions.
Less positively, average bus speed remained low at 11.7mph across England outside London. CPT has thus again called for action to increase that and says its analysis highlights a close connection between bus speed and driver productivity. Mr McNally says that were average bus speeds to rise by 10%, every driver could cover an extra 34 miles per week.
“Given that bus operators employ around 84,000 drivers, this alone could enable operators to provide an additional 135 million miles of services each year at no extra cost,” he adds. “This improvement could be delivered as extended hours of operation, and more frequent or more weekend services as well as new routes.
“In some areas, a 10% improvement in average speed would help to maintain routes where rising costs and changing revenues threaten to make services unviable.”
The Cost Monitor is prepared for CPT by consultancy 2FM. The Confederation hopes that its findings can help to inform constructive discussion and negotiation between transport authorities and bus operators about service levels, inflationary increases applied to contract prices, and about how to “fund the future services passengers want.”
