Quality Contracts debate misses the point

Our man in Westminster is once again amazed by the topsy-turvy world of politics, with two Conservative MPs supporting a Quality Contracts Scheme (QCS) in the north east, and a Labour MP opposing it. But there is also a woeful lack of understanding by MPs of the whole issue, he reports.

Last week, the Labour MP for Houghton and Sunderland South, Bridget Phillipson, secured a Westminster Hall debate on ‘Transport in the North East’. In the normal course of events I give these kind of debates a wide berth as they are normally of no value and tell us nothing we don’t already know. But on this occasion the debate threw up some interesting and curious comments, many of which just highlight the strange, even ill-informed, debate that surrounds Quality Contracts (QCs).

The first and most curious point to highlight is that two Conservative MPs expressed their support for Nexus’ proposals (Guy Opperman, MP for Hexham, and James Wharton, the MP Stockton South) while a Labour MP, Kevan Jones (North Durham) did not. How strange. Conservative MPs supporting QCs? A Labour MP opposing them? The topsy-turvy world of politics never ceases to amaze.

But some of the comments in the debate made me realise what little real knowledge politicians have of the issues. Bridget Phillipson told us that the QC proposal will “see real competition for the first time.” No it won’t. Competition has been possible since 1986 and the three main operators reflect local market dynamics, not a failure of competition. Operators can and do compete in the region. A QC will generate competition but for only one moment in time. There will be competition for the contracts, but no further competition for 10 years thereafter. Sorry Bridget, your comment is wrong.

She tells us a QC will allow new entrants to enter the market. Really? I have a hunch that any competition for QCs in the North East will be hard fought between the established operators given the in-built advantage incumbent operators should have. What happens if the QCs are won by existing operators which, if it is a truly fair competition, may well be the case? No new operators then Bridget.

Space does not allow me to highlight the many misleading points made by other MPs who took part in the debate. But let me highlight one key observation made by Labour MP, Kevan Jones, who opposes the proposals. He observed that the QC proposals from Nexus were “a solution looking for a problem, rather than a problem looking for a solution.” Exactly. The point is that whatever problems that might exist with bus provision in the North East – and MPs were not slow in highlighting them – won’t necessarily be solved by a QC. Whatever gaps there are in the bus market today can be provided without a QC. The relevant authorities simply have to step in and fill these gaps with tendered/subsidised services. The real question is: why have they decided not to?

If Nexus has decided it can afford the costs of QCs, why can’t it afford to subsidise services under the current processes?

Kevan Jones rightly points out that the QC proposals do not in themselves prevent service cuts in future years if the economics don’t work out, unless Nexus just throws money at the problem, money which it does not have.

Gordon Marsden (Labour, Blackpool South and a Labour transport spokesman) tells us that the problem has been caused because “the government has consistently slashed funding.”

Yes, but this is misleading because the decision to specifically cut bus services was taken by local authorities. It was local authorities that decided preserving bus services was less important than other services based on the budgets available.

We need honesty injected into this debate. Nexus is taking a huge risk with taxpayers’ money.