Balancing act needed for the industry

Finding the balance between private companies and the government’s influence in the market is ‘increasingly important’

The Department for Transport (DfT) recently announced it was allocating £2m to help small bus operators install audio and visual equipment in their vehicles to improve journeys, especially for those with visual or hearing disabilities.

This is to be welcomed. But I always get slightly twitchy when bus operators receive grants from the government, albeit for the right reasons, because it only increases the right of government to interfere in the industry.

At least this grant is being targeted at small operators which might otherwise find the installation of this equipment too costly. The large- and medium-sized operators certainly don’t, or shouldn’t, need government grants for this particular purpose.

Government support

The grant is a good thing because it’s for a good reason, and it’s good that it’s targeted. And at £2m, it’s hardly of an amount which really entitles the DfT to meddle more in the industry than it otherwise would. So I really don’t want to make too much of my slight anxiety.

But it’s the combination of a number of government interventions in the deregulated market that’s more of the issue. The Bus Service Operators Grant and any number of ad-hoc grants down the years, now combined with an impending National Bus Strategy, all start to paint a picture of an industry that isn’t a private sector industry in the true and pure sense of the word.

Bus services are unquestionably a public service for a whole variety of reasons, and perhaps there is an inevitable tension in the idea of private companies, which at the end of the day need to make a profit, providing a public service. I’m not saying that shouldn’t happen or isn’t a good thing – readers will have worked out that I support the principles of deregulation and privatisation.

But I’m also of the view that when the government provides financial support to private companies, and when it decides that there needs to be a government sponsored national bus strategy – something with the bus industry itself now supports – then there are consequences for this.

And those consequences are increased government intervention in a “private sector” market.  As a taxpayer, seeing my taxes helping private sector bus companies, that is something I also support.

Right balance

I’ve bashed on about the issue of increased government interference in the bus industry in recent weeks. I make no apology for doing so and returning to the issue again, because this is an issue that the industry should increasingly reflect on – especially as the national bus strategy is developed – and even more so if the government does indeed decide to contribute to the costs of Greater Manchester’s franchise proposals.

My point is this: Where is the right balance between allowing private sector companies to control and run their own businesses, and the government legitimately seeking to influence and shape the market in which they operate? Getting this balance right is increasingly important for the bus industry.