Is it commercial operators or the government itself which has led the industry to need £5bn in funding?
The government’s recent intervention in the bus market will be welcomed by passengers and local authorities alike. £5bn over five years to deliver 4,000 new zero-carbon buses, servicing many more routes currently not served or under-served, simpler and more affordable fares, and so on.
A few people have suggested to me that this level of government intervention in the bus market is an acceptance that the private sector has not delivered on the scale that ministers believe is required.
Indeed, if I was the Labour Party’s transport spokesman, I would be very tempted to make this argument – here is clear evidence, I would say, that the Conservative government does not believe that its deregulation policy has worked.
If deregulation was really working well, this level of government intervention would not be required.
Commercial bus market
It’s an easy political argument, but a false one.
Why should the commercial bus market provide services which do not provide some kind of commercial return?
The commercial market will provide where there is a return to be had. You can’t in all honesty expect anything more.
If the government wants to step in and provide funding for investment in new bus fleets, to support routes not provided by the commercial market, to help make fares more affordable and so on, all in support of wider social, economic and other policy objectives, that’s great.
But don’t present it as a failure of the commercial market – rather, it’s more a reflection of the government’s failure in the past to provide the level of funding required to fill the gaps left by the commercial market.
The slight weakness in this argument is that the private sector operators are in receipt of government subsidy so they arguably have a public duty to do more than just make profits, but this takes you into difficult territory.
At the end of the day, I don’t really see why private companies should be expected to do anything other than make a commercial return.
Two sides
It’s actually a reflection of the fact that there are two sides to the bus market.
There is the commercial market, and there is a subsidised market.
Yet again this all underlines that the bus market is best served when the private sector works in partnership with the public sector – and everybody can be a winner.
The only issue is a public policy one: What level of intervention does the government (or local authorities) feel is necessary to fill all the gaps the commercial market isn’t filling?
And it’s worth reminding ourselves that if the private sector bus operators weren’t providing on the level they are, the cost to the public sector in stepping in would be astronomical.
Anyway, some good news following the recent reshuffle. Baroness Vere keeps the buses brief, which is a relief as at least it means yet another new minister doesn’t have to be briefed up on the issues, which is always a bit of a distraction.
