The Department for Transport (DfT) has hired consultants KPMG to examine whether franchising might be an appropriate model, and if candidate locations exist.
At the same time, Labour has announced plans to hand local bus services to ‘not-for-profit’ operators including community transport in a plan to â€œend the market dominanceâ€ of the ‘big five’.
The DfT’s wide-ranging review of England’s bus market, outside London, comes as the north-east looks to implement a Quality Contracts Scheme (QCS) and Manchester has been offered new powers over buses by the Chancellor George Osborne.
Six key questions are being asked in the KPMG study, and the aim is to allow ministers to gain an understanding of costs, benefits and the commercial consequences of a ‘mosaic’ regulatory model.
The study will consider under what circumstances a change in the current de-regulated model would be a better option for passengers and taxpayers, and if there are locations where such circumstances currently exist.
A progress report is expected in early March, with a final report in June, after the 7 May General Election.
Meanwhile, an incoming Labour government would â€œgive councils the power to award local licencesâ€ and make it â€œmuch easier for non profit-making groupsâ€ to run services. Labour says the move will â€œthrow a lifeline to rural areas left isolated by the loss of services,â€ where mileage has fallen by 23% since 2010.
Labour shadow Transport Secretary Michael Dugher says: â€œLike the energy market, the bus market is broken. Developing a thriving not-for-profit sector is one way Labour will rebalance our bus market. The significant development of the not-for-profit model will help city and county regions break the stranglehold that the big private bus operators currently have.
â€œThere is a proud and growing British tradition of community transport in the UK. It is a sector that serves both rural and urban areas, often operating in areas the commercial operators have turned their back on. In government, Labour will ensure that communities cannot be held to ransom by operators threatening to pull buses and cut services.â€
According to the latest DfT figures, passenger journeys in England increased by 2% to 4.7bn in the year to March 2014, the highest figure since the mid-1980s.