There are many things wrong with the bus industry in the UK at the moment.

Services are too slow – because they sit in traffic jams. Fares keep rising because costs go up; and demand falls for a whole variety of reasons: increasing car ownership, services that are less attractive becuase they’re slow and held up in traffic, and of course the recession.

And the other problem is profit: quite simply, it’s too low. The companies who run Britain’s bus services do not earn sufficient revenue to enable them to meet their financial obligations, invest for the future and maintain or grow networks. In fact, our research shows that profit levels in the industry have halved in the last decade, and are now at levels that are not sustainable in the long term.

On top of all this lot, there’s the delights of a free concessionary fares scheme that is a copybook example of how not to make public policy; where both local authorities and bus companies feel hard done by a government that simply will not listen, and as a result of which bus companies are withdrawing services and local authorities cutting expenditure.

We even have a situation in Blackpool where the transport company has to compete with its own tram services to cater for visiting pensioners who, for some bizarre reason, can’t use their passes on the tram. Then the local authority runs out of money, cuts the reimbursement levels and forces the operator to cut other services and make people redundant. And I thought free concessions were designed to help the industry!

And then we have a Minister who wants to micromanage everything  (as if he and his colleagues haven’t got enough to do micromanaging the railways), by fiddling about with the grant system to provide pointless incentives to operators to do things that they would do anyway if only they could be allowed to earn the money to pay for them.

And into this delightful mix comes the Office of Fair Trading, which has spent the best part of the last 20 years proving that it doesn’t understand the bus industry (and even gets indignant when passengers don’t behave according to its expectations by getting on the first bus that comes along rather than waiting for the cheaper one: tell that to passengers waiting in freezing temperatures!).

Not enough competition, is the cry, so we have a referral to the Competition Commission. Another completely pointless waste of public money and scarce management resources whilst everybody spends 18-24 months arguing about the wrong issues.

What bus services need is to be able to become more efficient, through bus lanes and traffic light priorities, through new ticketing systems like Oyster, and co-ordinated policies to ensure that sparsely populated and rural areas get access to public transport networks.

Above all, we need a rational understanding of the economics of the industry: its costs, its market position and the sort of regulatory regime that it needs in order to serve its customers really well. This can, and is, being done in all sorts of places round the country – Brighton, Oxford, Cambridge and York to name but four – and there are many other examples too, witness the achievements of the winners and finalists at the annual UK Bus Awards.

At TAS, we aim to provide this in our research abnd analysis of the financial and market performance of the bus industry – work we’ve been doing for some 20 years now. Let’s hope that the Competition Commission enquiry gets to grips with the real issues about bus operation – which are about efficiency, speed, productivity and competition with the private car. But I beg leave to doubt it.

Want to know more?

• Our detailed analysis of many of these issues, including a proper rational survey of the fares people pay, was published in our report The Economics of Bus Operation last November. We followed this up with a seminar in London at the beginning of December.
• You can see more about the report on our publications website and download a free summary report.
• Alternatively, you can purchase the full report from our online shop.
• We’ve also now uploaded the slides from the sessions at the seminar, which can be seen on the main TAS Gateway site.
• If you want to understand more about what drives demand for bus services, you can also watch a short 6-minute video by clicking HERE.