Labour announces plans to assist not-for-profit operators

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Labour has announced plans to hand local bus services to ‘not-for-profit’ operators including community groups, with the aim of ending the market dominance of the big five bus operators, The Independent has reported.

An incoming Labour government would give councils the power to award local licences and make it easier for non profit-making groups to run services. Labour claims the move will throw a lifeline to rural areas, and likened the policy to its interventionist plan to reduce the power of the ‘big six’ energy companies. It argues the local bus market is not working for passengers because 2,000 routes have seen services reduced or cut since 2010, while fares have risen by 25%.
Labour wants to reduce the market share held by Stagecoach, Arriva, Go-Ahead, FirstGroup and National Express, which stands at 72% of the market in England.

An incoming Labour government would set up an immediate review of how to boost the not-for-profit transport sector, with the aim to assist local groups or co-operatives to run mini-buses or traditional buses. The party cited Hackney Community Transport as an example, formed in 1982 to provide low-cost minibus services for residents in the London borough, which has since expanded into Yorkshire, Humberside and the South West.

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Michael Dugher, the Shadow Transport Secretary, said: “Like the energy market, the bus market is broken. Developing a thriving not-for-profit sector is one way Labour will rebalance our bus market. The significant development of not-for-profit model will help city and county regions break the stranglehold that the big private bus operators currently have.

“There is a proud and growing British tradition of community transport in the UK. It is a sector that serves both rural and urban areas, often operating in areas the commercial operators have turned their back on. In government, Labour will ensure that communities cannot be held to ransom by operators threatening to pull buses and cut services.”

According to the Department for Transport, passenger journeys on local buses in England increased by 2% to 4.7bn in the year to March 2014, the highest figure since the mid-1980s. Bus service mileage fell by 0.3%.

A Confederation of Passenger Transport spokesman said: “Whilst Labour’s policy proposal to allow not for profit organisations to run local bus services might look attractive on the surface, it does not really stand up to scrutiny – as many, small and in many cases family run bus and coach companies who have been serving their communities for years would testify.

 “No one would doubt the value of the community transport sector but where will they find the capital for mainstream bus services if they are not allowed to make a return? What will the unions think when secure posts with successful companies are replaced by voluntary labour and minimum wage jobs with hand-to-mouth CICs?
“Bus drivers in the commercial bus industry have a rigorous and continual regime of training laid down by the EU, something that drivers in the community transport sector are simply not required to undertake. Commercial operators are continually investing in high quality, modern, environmentally friendly vehicles with the latest on-board technology to make the bus journey easier and more enjoyable for their passengers. Labour seems to be fixated on clobbering the large operating groups but there are also a huge number of medium sized and small operators in the commercial market. And let us not forget that 81% of bus mileage outside London is run purely on a commercial basis with no subsidy whatsoever. CPT believes commercial operators deserve credit for keeping the buses running on routes that have been abandoned by cash-strapped local authorities.
“What do passengers prefer? Ask bus users in Witney who recently described their local CIC operator as ‘diabolical.’ ‘It wasn’t a good service and I don’t think one person had a good thing to say about it,’ said another user.”