Tories Warned as Government Reveals Spiralling Cost of Bus Travel (South East Cambridgeshire Liberal Democrats)

South East Cambridgeshire Liberal Democrats <info@secambslibdems.org.uk>

Tories Warned as Government Reveals Spiralling Cost of Bus Travel

September 27, 2010 7:25 PM

Cllr Killian Bourke said that the county council has no real negotiating power in relation to bus services

Two government reports into the "Big Five" bus operators, including Stagecoach which runs 86 per cent of Cambridgeshire services, show passengers are paying over the odds for their tickets.

The Department of Transport reports submitted to the Competition Commission for its investigation into local bus travel, show that prices rose by 53 per cent between 1985 and 2008, far more than the cost of train and air travel.

Liberal Democrats claim Cambridgeshire's Tory-run county council, which subsidises many Stagecoach services, should learn a lesson from the reports.

Highways spokesman Kilian Bourke said: "These reports confirm what people in Cambridgeshire already know, that cartels are good for profit margins, not paying customers.

"The Conservatives running the county council have made a strategic error in allowing Stagecoach to dominate the region so completely. Despite paying it over a million pounds a year in subsidies and giving it the lucrative Park and Ride contract, the lack of competition means that the council no longer has any real negotiating power.

"We saw this last winter when Stagecoach cut services across the city, blaming the recession; six months later it revealed it had a bumper year. Where was the county council when it was needed?"

One of the reports states: "Greater transparency about the profitability and efficiency of bus operators might help determine when fare levels are competitive."

And it adds that the absence of effective competition could result in "a lack of competition for tendered services resulting in higher prices for taxpayers".

The report also states that if the market were fully competitive, returns on capital for operators should be between eight and 11 per cent but, in fact they are between 13 and 24 per cent for major operators.

In Cambridgeshire, Stagecoach's nearest competitor Whippet runs just six per cent of services. Stagecoach also has an exclusive agreement with the county council to provide the Park and Ride service. Its chief executive, Brian Souter, once described Cambridge as the "jewel in the crown" of its regional operation.

Newly-elected East Chesterton County Councillor, Ian Manning said: "During the election campaign in East Chesterton people on the doorstep were furious. They felt that the Conservatives shouldn't be subsidising this monopoly if they can't even get the Park and Ride bus to stop in our ward.

"The county council should be working to extract social value from the operator, not just lining its pockets with taxpayers' money."