• Fares rises of 24% and patronage decline of 20% predicted

A new report for pteg suggests there will be tough times ahead for urban bus services outside London, given government cuts to both local government funding and wider support for bus services.

The report used the most sophisticated modelling tool currently available for forecasting the impact of public spending reductions, at an aggregate level, across the bus markets in Britain’s six largest urban areas outside London.

It forecasts that between 2009 and 2014:

• Patronage will decline by 20%
• Fares will increase by 24% above the rate of inflation
• Service kilometres will decline by 19%

The impact of this decline on the wider economy will be an increase in urban congestion costs of £68 million.

This forecast decline will reflect a continuation of recent trends. The latest available DfT figures show that in the metropolitan areas bus patronage fell by 2.9% between 09/10 and 10/11.

The report concludes that:

‘These results show that the trend towards rising fares and falling demand, observed over the past decades in metropolitan areas, are likely to continue into the foreseeable future. If anything, this trend is likely to be compounded by the current economic climate and confirmed cuts in central and local government services.’

The report also looks at what the implications would be if the Competition Commission were to be entirely successful in reducing excess profits and competition failure in the industry. These scenarios necessarily require a more complex set of assumptions, however the modelling exercise suggests that reductions in service levels (even with government spending cuts) would be substantially reduced, fare levels would not increase and patronage decline would slow down.

Chair of the group of six Integrated Transport Authorities, Cllr Mark Dowd, said:

‘The scenario testing in this report gives an objective assessment of the likely impact of public spending reductions on bus services for the millions of passengers who rely on the bus in the largest urban areas outside London. It gives a clear warning that without policy change we face further vertiginous decline in bus services which will have significant impact on traffic congestion, social division, carbon emissions and on the ability of our cities to play their full part in rebalancing the national economy.’

Cllr Dowd added:

‘As Integrated Transport Authorities we have a big job to do in working with bus operators to ensure that these forecasts do not become reality. We are doing this through using new powers available in the Local Transport Act 2008 to improve services, through introducing smartcard ticketing, and through continuing to invest in better infrastructure for buses, like new interchanges and more bus lanes. However, we also need the Government and the Competition Commission to do their bit by taking a long hard look at both current levels of support for bus services and how it can be most effectively deployed to make every pound count. A business as usual bus policy from Government will mean bus service decline as usual – with the most vulnerable in our society the ones who will lose out. What this report shows is that without policy change from Government we will be continually trying to run up a downward escalator of funding cuts.’

The report – ‘Underpinning Policy: Modelling bus subsidy in English Metropolitan Areas’ - by MVA Consultancy, for pteg, can be downloaded below.

ENDS

pteg represents the six PTEs and ITAs serving eleven million people in the metropolitan areas of Greater Manchester, Merseyside, West Midlands, South Yorkshire, West Yorkshire and Tyne and Wear. Half of all bus trips outside London are made in these areas.

For more contact Jonathan Bray on 0113 251 7445 / 0781 804 1485