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Councils' bus costs fall for sixth year, survey finds

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Councils’ spend on renewing local bus contracts has dropped for the sixth consecutive year, a new survey has found.

The Association of Transport Co-Ordinating Officers’ annual price expenditure and competition survey for 2014 found the costs of new contracts for bus routes, which are subsidised by councils because they are considered socially necessary were 2.9% lower than in 2013.

The costs of replacing school transport contracts fell by an average of 3.1%, while the expense of renewing contracts for special educational needs transport dropped by 3.2%.

In both cases this represents eight consecutive year of falling costs.

These falls come as budget cuts have reduced the amount councils can spend on transport.

Some 36% of councils said they expected to cut services to stay within their budgets against 26% the previous year.

The survey drew responses from 75 out of 130 local transport authorities outside of London.

ATCO’s performance group secretary Robin Riley said: “There has been increased competition with operators taking lower margins to stay in business.

“That is good news for councils, but on the other hand their own budgets have fallen even quicker.”

ATCO has also released a separate benchmarking survey, based on data from 87 authorities.

This indicates that councils’ annual spend on local bus services per head has fallen by 5.6% over eight years to £5.70, despite costs for schools and special educational needs transport rising over the same period by 24% and 18% respectively.

Meanwhile, the Institute for Public Policy research thinktank has called for the creation of ‘total transport authorities’ across England, based on emerging combined authority boundaries in both urban and rural areas.

The thinktank said these new-style authorities should have powers to consolidate the various public subsides given to operators and to organise bus franchising on similar lines to London.

Its report added that bus franchising would reverse the decline in usage seen in most places outside London by creating stable networks under democratic control and aligned to local economic needs.

These steps would, it said: “Promote social justice by improving bus services for thousands of people in isolated communities, and reduce carbon emissions by providing a viable alternative to car travel”.

The new authorities would also become responsible for introducing integrated ticketing across all modes of transport, similar to Greater London’s Oyster card.

ATCO has, however, warned that councils’ relationship with bus operators could change if they were to gain control over franchising bus services.

Such passing down of power has been offered by the government in devolution deals for Greater Manchester and Cornwall and features in most other proposed devolution bids.

A Buses Bill is expected later this year to introduce franchising within devolution deals.

This would be similar to the capital’s system, where operators bid to run services whose routes, fares and frequencies are specified by Transport for London.

Elsewhere, operators at present set whatever services and fares they choose, though councils may subsidise socially necessary routes.

ATCO chiar Chris White said his members were divided on the prospect of franchising with some, in particular in rural areas, concerned as to whether they had the capacity to plan route networks. “There is perhaps more enthusiasm in urban areas,” he said.

The Confederation of Passenger Transport, which represents the operators, has long opposed franchising.

Chief executive Simon Posner said: “The industry firmly believes that the way forward lies in successful partnership working between operators and local authorities.”




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