PTEG forecasts bus cuts and fares rises

PTEG forecasts bus cuts and fares rises PTEG forecasts bus cuts and fares rises
Between 2009 and 2014 bus fares in England’s six biggest urban areas outside London will have increased by 24 per cent while passenger numbers will have fallen by 20 per cent, according to the worst-case scenario in the latest research from PTEG, the Passenger Transport Executive Group. The research shows that the best outcome – a 7 per cent drop in patronage and no increases in fares – will come about if the Competition Commission takes action in the light of its investigation into the bus industry.

The report, by MVA Consultancy, notes in relation to this option: “If we assume a reduction in the market power of incumbent operators, then the result would be a more balanced sharing of cost increases and subsidy decreases between operators and passengers. As a result, fares are kept close to their 2009 levels and mileage is reduced by a much smaller proportion than in any of the other scenarios. Given the modest increase in fares, patronage is also less affected as is the case with concessionary reimbursement, which falls in real terms over the period. Overall, this leads to the lowest level of public expenditure of any scenario.

“Much of this expected decline in patronage could be averted, but at the expense of operator profit margins, if the current Competition Commission investigation led to reductions in the market power of
incumbent operators.”

The chairman of the group of six integrated transport authorities, Mark Dowd, says: “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.

“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.”