CMA undertakings against First Bristol removed

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First Bristol will no longer have a cap on local authority contract revenue and profits. MIKE SHEATHER

Ruling made in 1989 is finally revoked after universal agreement that it is no longer having any beneficial effect

The Competition and Markets Authority (CMA) is to remove long-standing undertakings covering tendered bus services in the Greater Bristol area.

The undertakings, covering First Bristol and local authority bus services, were put in place following the 1989 merger of Badgerline and Midland Red West, which was investigated by the Monopolies and Mergers Commission (MMC).

The MMC ruled in 1989 that the merger would remove competition for bus services contracted by the former Avon County Council.

Badgerline was subsequently renamed FirstGroup Holdings Limited (a subsidiary of FirstGroup plc), which then became subject to the restrictions, including a cap on the amount they could receive from the local authority for running a tendered service and a requirement to return any excess profit from such services.

The CMA has been reviewing the undertakings since January 2017 to consider if there has been any change of circumstances which would justify the removal or variation of the undertakings. During the investigation it was found that FirstGroup’s share of tendered bus services in the region has reduced significantly since the MMC report and that in the most recent tender rounds, FirstGroup did not win any contracts at three of the four local transport authorities. The CMA engaged with local stakeholders during the investigation, none of which argued that the undertakings were having a beneficial effect and should be retained.

In June, the CMA launched a consultation on its provisional decision to remove the undertakings. No representations were received and the CMA therefore decided to release the undertakings.

A First Bus spokesperson welcomed the decision and told the BBC: “Neither the original undertakings themselves nor the consequences of this decision impact the way we provide bus services in Bristol and the wider West of England region.”